("Constellation Brands 4Q Loss Narrows Amid Lower Charges,"
published at 8:29 a.m. EDT, incorrectly said margins improved and
misstated analysts' revenue forecast for the period. The correct
version follows.)
DOW JONES NEWSWIRES
Constellation Brands Inc.'s (STZ) fiscal fourth-quarter net loss
narrowed amid lower restructuring charges, despite falling sales
and margins.
While the company - the biggest global wine maker by volume -
has been considered recession resistant, it hasn't necessarily been
recession proof. Late last month, Constellation said it would
eliminate 5% of its global work force of 9,000 people and projected
disappointing earnings for the current fiscal year. The company
said Wednesday it is aiming to save $25 million through its
cost-cutting moves this fiscal year and more than $50 million by
the end of the next year.
For the quarter ended Feb. 28, Constellation reported a net loss
of $406.8 million, or $1.88 a share, compared with a prior-year net
loss of $834.8 million, or $3.91 a share.
The latest period included $468 million in restructuring costs
and other charges, mostly related to a decline in its U.K. and
Australian businesses, compared with $888 million a year
earlier.
Net sales, which exclude excise taxes, decreased 17% to $735
million. Analysts polled by Thomson Reuters were looking for
revenue of $791 million.
Gross margin fell to 26% from 35.2%.
"Turbulent global trading conditions negatively impacted our
sales mix in the fourth quarter, which in turn affected our gross
profit margins," said Rob Sands. "However, we have been able to
partially offset these challenges through cost reductions which
reflect our flexibility to quickly adapt."
The company has been shifting its focus to higher-priced
products, where most of the growth has been in the alcoholic
beverages industry in recent years.
Branded wine sales, which represent the bulk of its earnings,
fell 4% amid a sharp decline in demand in Europe. Spirits sales
increased 6%, driven by the growth of Svedka vodka brand.
For the current fiscal year, the company expects per-share
earnings of $1.60 to $1.70, in line with analysts' views for
$1.65.
Shares fell 2% to $11.40 in recent trading and are off 28% so
far this year.
-By Tess Stynes and Katherine E. Wegert, Dow Jones Newswires;
201-938-2473; tess.stynes@dowjones.com